In many cases, someone who commits money launderingwill strive to disguise, divert, transfer, spend or change the form of treasures or assets that have been allegedly derived from criminal activities in order to make them as artificially legitimate treasures and then they can safely enjoy them. Still fresh in our mind about high profile cases i.e. corruption case of Tax Institution Officer, banking crime of Citibank case, and SKK Migas bribery case which overall were involving employee of national and private company, politicians, functionaries, and even officials at law institutions enforcement. Furthermore, Mostly of them was not only convicted to criminal act alleged but also proved by doing money laundering. The reason of the conviction of them by money laundering clause was because the whole sequence ofmoney laundering has caused in micro and macro-economic losses for the State. Sjahdeini (2007) cites the opinion of John McDowell and Gary Novis from the Bureau of International Narcotics and Law Enforcement Affairs (INL), US Department of State that argued money laundering potentially damaging the economy, security, and social impact. Moreover, the Indonesian Financial Transaction Reports and Analysis Centre – INTRAC (2007) also explained that the money laundering activities that occur in a country at the macro level can complicate monetary control and reduce state revenue, whilst at the micro level will caused high-cost-economy and disrupt the healthy competition system.
State losses scale that was inflicted bymoney laundering demanded countermeasure and eradication that have to be actively, effectively, and simultaneously carried out. According to Reuter and Trauman (2004) in Condrokirono’s book (2009), there are two main pillars in the fight against money laundering, i.e.:Prevention Pillarand Enforcement Pillar.In the prevention pillar there are four elements, i.e.:Customer Due Diligence, Reporting, Regulations, andSanction.Whilst Enforcement Pillar consists of four elements, i.e.:Predicate crime, Investigation, Prosecution, andPunishment.Through the Laws No. 8 of 2010 regarding the Countermeasure and Eradication of Money Laundering (Laws No. 8/2010), Indonesia is trying to fulfill the two pillars—prevention dan enforcement.
Fulfillment of Prevention Pillar: 1) The fulfillment of Customer Due Diligence element can be seen at Article 18 and Article 22 in Laws No. 8/2010. The Articles regulated how financial service providers and other goods/service providers participate in the effort to prevent money laundering by the obligation “recognizing the customers” when conducting transactions with their clients/customers. There was also described in the Laws that Recognizing the Customers Principle at least includingCustomer Identification, Customer Verification, and Monitoring Customer Transaction.For Examples, when the bank customer performing financial transactions over Rp.100,000,000.00 (one hundred million rupiah), then the bank customer will be obligated to give certain information about self-identification, source of fund, and transaction purpose by filling out a bank form of declaration and attaching documents supports; 2) The fulfillment of reporting element can be seen at Article 23 and Article 30 in Law 8/2010. The articles explained about the obligation of financial service providers to report to the INTRAC, i.e. Suspicious Transaction Reports (LTKM), Cash Financial Transaction Reports (LTKT), and the Financial Transaction Transfers Reports from and to Abroad. Furthermore, the goods/service providers were obligated to report every transactions over Rp500.000.000,00 (five hundred million rupiah). The fulfillment of this element can also be seen at the regulation regarding the cash carried or other payment instruments from / to the Indonesian customs area in Article 34 to Article 36 of Laws No. 8/2010. Additionally, Directorate General of Customs are involved in this countermeasure act; 3) The fulfillment of regulation element is clearly seen with the enactment of Laws No. 8/2010; 4) The fulfillment of sanction element can be seen at the punishment section at Laws No. 8/2010. The heaviest punishment for money launderers is being categorized in violate of Article 3, with the maximum imprisonment of 20 years and a maximum fine of Rp10.000.000.000,00 (ten billion rupiah).
The Fulfillment of enforcement Pillar: 1) The fulfillment of the predicate crime elements can be seen at Article 2 of Laws No. 8/2010. The article listed 26 types of criminal activities that can be categorized as a predicate crime for money laundering, and other criminal activities that can be punished with imprisonment of 4 years or more. Predicate crime underlying the occurrence of money laundering; 2) The fulfillment of investigation element. Laws No. 8/2010 regulates the authorized parties to conduct the investigation of money laundering, including Police Department, General Attorney, the Corruption Eradication Commission (KPK), the National Narcotics Agency (BNN), the Directorate General of Taxation, and also Directorate General of Customs; 3) The fulfillment of the prosecution element. Laws No. 8/2010 regulates the General Attorney and the KPK to conduct the prosecution; 4) The fulfillment of the punishment element. Laws No. 8/2010 regulates about the criminal sanctions that can be imposed for money laundering and the authorized institution to conduct the trial, i.e. the General Court and the Corruption Court.
The description about the fulfillment of the prevention and enforcement pillars in Laws No. 8/2010 above illustrates that Indonesia has seriously conducted both countermeasure and eradication. Laws No. 8/2010 is an amendment of the Laws No. 15 of 2002 (Laws No. 15/2002) as amended by Laws No. 25 of 2003 (Laws No. 25/2003) regarding money laundering. It can be said that Laws No. 8/2010 as a refinement of the provisions of the previous Laws of Money Laundering. Moreover, as being described in Explanatory Section of Laws No. 8/2010, including: the redefinition of notion related to money laundering; the arrangement related to criminal and administrative punishment; strengthening the application of Customer Recognizing Principle; the establishment of the type of reports by of goods/services providers; arrangement related to compliance monitoring; authority granting to the complainant to postpone the transaction; the expansion of the authority of the Directorate General of Customs to the cash carried and other payment instruments into or out of the customs area; authority granting to the predicate crime investigators to investigate the allegations of money laundering; authorization extension of agencies that are eligible to receive the results of the analysis or examination from INTRAC; institutional restructuring of INTRAC; additional authority of INTRAC, including the authority to suspend in progress transactions; realignment of investigation procedural law of money laundering; and the arrangement related to foreclosure Assets derived from criminal activities.
Finally, it have to be expected that the current Laws of Money Laundering related to the countermeasure and eradication of money laundering can be more actively, effectively, and simultaneously accomplished. Furthermore, the existence and the participation of INTRAC and other parties are expected tosustainable and well coordinated with each other and have integrity.
Sjahdeini, Sutan R. (2007). Seluk Beluk Tindak Pidana Pencucian Uang Dan Pembiayaan Terorisme. Jakarta: PT Pustaka Utama Gravity.
Indonesian Financial Transaction Reports and Analysis Centre (INTRAC). (2007). Annual Report 2006. Jakarta: INTRAC.
Scientific Paper (Thesis)
Condrokirono, Nurul I. (2009). Tinjauan Kriminologi terhadap Upaya Indonesia Agar Tetap Berada di Luar Daftar Non-Cooperative Countries and Territories (NCCTs). Depok: Fakultas Ilmu Sosial dan Ilmu Politik Universitas Indonesia.
Republic of Indonesia. (2010). The Law Number 8 Year 2010 considering Countermeasure dan Eradication of Money Laundering.